Earnings Presentation
2nd Quarter, 2016
Disclaimer: This presentation may include references and statements on expectations, planned synergies, growth estimates, projections of results, and future strategies for Banco
Votorantim, it’s associated and affiliated companies, and subsidiaries. Although these references and statements reflect the management’s belief, they also involve imprecision and
risks that are highly difficult to be foreseen. Consequently, they may conduct to different results from those anticipated and discussed here. These expectations are highly dependent on
market conditions, on Brazil’s economic and banking system performances, as well as on international market conditions. Banco Votorantim is not responsible for bringing up to date
any estimate in this presentation.
2
Net Income of R$ 108M in 2Q16 Consistent results, with delinquency under control and nominal reduction of cost base
Executive summary
Net Income
of R$ 108M
Net Income of R$ 108M in 2Q16, compared to R$ 86M in 1Q16
• In 1H16, the net income totaled R$ 194M (R$ 268M in 1H15)
Shareholders’ equity reached R$ 8.28B in Jun/16 (R$ 8.08B in Mar/16)
Consistent
revenue
generation
Income from Services and Insurance increased 12.3% in 1H16/1H15, to R$ 639M...
...which virtually offset the 3.0% decrease observed in the Net Interest Income in the same period,
due to the conservatism in credit underwriting and demand retraction
Conservative
approach
to credit
Expanded credit portfolio decreased 10.9% in the last 12 months and 4.0% in 2Q16, to R$ 59.4B
• CIB led the portfolio reduction in the 2Q16 (Jun/16: R$ 26.3B; Mar/16: R$ 28.4B)
• In Consumer Finance, the Vehicles portfolio remained practically flat in 2Q16 (R$ 27.5B)
Delinquency
under control
90-day NPL of 4.6%, stable in comparison to Mar/16
• Wholesale (CIB): 90-day NPL dropped to 2.0% (Mar/16: 2.4%)
• Consumer Finance: 90-day NPL of 5.7%, 10 bps higher than Mar/16 (5.6%)
Coverage Ratio of 148% in Jun/16, against 145% in Mar/16
Effective cost
management
Personnel and administrative expenses decreased nominally 0.7% in 1H16/1H15¹
Efficiency Ratio for the last 12 months remains below 40% (Jun/16: 39.7%)
Highlights of results
1. Despite inflation in the period (the IPCA price index reached 8.8% in the last 12 months)
3
Net Income of R$ 108M in 2Q16
Consolidated results
108
86
137146
122
77
+25.5%
2Q16 1Q16 4Q15 3Q15 2Q15 1Q15
R$194M
Net Income (R$M)
2Q16 profit confirms the consistency
of Banco Votorantim’ s results
R$268M
R$482M
4
Net Interest Income (A) 1,291 1,233 1,163 -5.7% 2,470 2,397 -3.0%
ALL expenses¹ (B) (448) (508) (457) -10.0% (866) (965) 11.4%
Net Financial Margin (A+B) 843 726 706 -2.7% 1,604 1,432 -10.7%
Operating Income/Expenses (638) (551) (547) -0.7% (1,178) (1,098) -6.8%
Income from Services and Banking Fees 220 257 264 3.0% 463 521 12.6%
Personnel and Administrative expenses (584) (556) (601) 8.1% (1,165) (1,157) -0.7%
Tax expenses (94) (96) (96) 0.1% (227) (191) -15.6%
Income from subsidiaries² 39 43 47 11.0% 77 90 16.6%
Other Operating Income/Expenses (219) (199) (162) -18.3% (326) (361) 10.6%
Operating Income (Loss) 205 175 159 -8.8% 426 334 -21.6%
Non-Operating Income (Loss) (15) (0) 6 - (17) 6 -
Income Tax and Profit Sharing (45) (88) (57) -35.3% (141) (145) 3.1%
Net Income 146 86 108 25.5% 268 194 -27.4%
1H161Q16 2Q16Var.
2Q16/1Q161H15(R$ Million)
Var.
1H16/1H152Q15
Highlights of Results 2Q16: ALL expenses reduction. 1H16: consistent revenue generation and reduction of cost base
Consolidated results
1. Allowance for Loan Losses (ALL), net of revenues from recovery of written-off loans; 2. Subsidiaries accounted by the equity method
Managerial Income Statement (R$M)
5
Consistent revenue generation 1H16 x 1H15: reduction in NII offset by the growth of income from services and insurance sales
NII decreased in 2Q16/1Q16,
reflecting the conservative approach to credit
Income from Services and Insurance
grew QoQ and YoY
Insurance
(Commission)
Services and
Fees
-5.7%
2Q16
1,163
1Q16
1,233
257 264
54 64
+5.6%
2Q16
328
1Q16
311
Auto finance
origination (R$B)
Expanded credit
portfolio² (R$B)
-3.0%
1H16
2,397
1H15
2,470
463521
106
118
+12.3%
1H16
639
1H15
569
61.9 59.4 66.7 59.4
- 4.0% -10.9%
2.9 3.1 6.3 6.0 5.1% 4.9% 5.3% 5.0% NIM¹ (% p.y.)
Net Interest Income – NII (R$M) Income from Services, Fees and Insurance3 (R$M)
1. Ratio between Net Interest Income and Average Interest-Earning Assets; 2. Includes guarantees provided and private securities;
3. Result of the stake in Votorantim Corretora de Seguros (insurance brokerage) is recognized using the equity method.
Revenues
6
-10.9% -4.0%
Corporate &
Investment
Banking (CIB)
Auto Finance
Payroll
Credit Cards
Jun/16
59.4
27.5
4.2 1.4
Mar/16
61.9
28.4
27.7
4.4 1.3
Jun/15
66.7
31.6
28.8
5.1 1.1
26.3
Maintenance of the conservative approach to credit Total credit portfolio decreased 4.0% in 2Q16, while the Vehicles portfolio remained virtually flat
Portfolio contraction drives the continued focus on
asset quality and profitability
-7.5%
-0.7%
∆Jun16
/Mar16
-5.1%
+6.2%
-16.8%
-4.5%
∆Jun16
/Jun15
-17.4%
+27.6%
Expanded credit portfolio (R$B) (includes guarantees provided and private securities)
Credit portfolio by segment
7
358 402285 348 341
90
672
168159 116
-10.0%
2Q16
457
1Q16
508
4Q15
453
3Q15
1,075
2Q15
448
Credit provision expenses reduced 10% in 2Q16/1Q16 Provision expenses reduced both in Consumer Finance and Wholesale (CIB)
Credit provision expenses
reduced 10% in 2Q16/1Q16
90-day CR remains in a conservative level,
ending Jun/16 at 148%
1. Allowance for Loan Losses, net of income from recovery of written-off loans; 2. Ratio between the balance of ALL and the balance of loans past due over 90 days
148%145%
150%
163%
146%
2,254
Mar/16
3,271
Dec/15
2,923
4,387
Sept/15
2,712
4,425
Jun/15
2,727
3,979
Jun/16
2,174
3,221
90-day NPL balance (R$M)
Allowance for Loan Losses balance (R$M)
Wholesale
(CIB)
Consumer
Finance
-2.0%
-27.5%
∆2Q16/
1Q16
Prudential
strengthening of ALL
90-day
Coverage Ratio (CR)
90-day Coverage Ratio² (%) – Managed portfolio Credit provision expenses – ALL¹ (R$M)
Credit indicators – ALL and 90-day Coverage
8
5.38%
5.7%
5.33%
5.6%
5.35%
5.7%
5.33%
5.4%
5.32%
5.4%
Total
90-day NPL ratio of 4.6%, stable compared to Mar/16 In 2Q16, Wholesale’s delinquency improved 40 bps and Vehicles’ remained practically stable
Wholesale
(CIB)
4.6% 4.6%
5.7% 5.3% 5.2%
Jun/16
2.0%
Mar/16
2.4%
Dec/15
5.8%
Sept/15
5.0%
Jun/15
4.8%
Consumer
Finance
Vehicles Consumer
Finance 90-day market¹ NPL
increased 60bps over
the last 12 months
1. National Financial System. 90-day NPL obtained in the historical series released on the Central Bank website
90-day NPL ratio of the managed loan portfolio (%)
Credit indicators – Delinquency
9
Jun/16
1.0
1.2%
Jun/15 Jun/14 Jun/13
1.0
Jun/12 Jun/11
1.8
Jun/10 Jun/09
1.1
Auto finance: maintenance of quality in auto finance
origination, focusing on used cars
Lower quality vintages
Inad 30¹ (by vintage)
Used car dealers
New car dealers
1. First payment default, or % of each month’s production with first installment past due over 30 days
Participation in the
portfolio was practically
zero in Jun/16
Auto Finance – Origination by channel (R$B) and first payment default by vintage – Inad 30¹ (%)
Consumer Finance – Auto Finance
Steady quality in auto finance origination has contributed
to the favorable trend in delinquency
10
1H16
6.0
4.9
(82%)
1.1
1H15
6.3
5.2
(82%)
1.1
Used
Cars
Other
Vehicles¹
2Q16
3.1
2.5
0.6
1Q16
2.9
2.4
0.5
2Q15
3.0
2.5
0.5
Auto finance: continued focus on used cars and
maintenance of tight credit origination standards
1. New cars, trucks and motorcycles; 2. Benchmark interest rate (Central Bank). Note: In Jun/16, the average ticket size was R$ 21,000, and the average vehicle age was 4.8 years (portfolio)
Focus on used cars, which
represented 82% of 1H16 origination Maintenance of conservative lending standards
D Cars Market:
• New cars: -32%
• Used cars: -10%
-5.1%
-6.1%
∆1H16
/1H15 41% 41% 42%
444444
2Q16 1Q16 2Q15
Down payment
Average term
Jun/16 Mar/16
14.25 14.25
29.1
Jun/15
26.5
13.75
27.3
Selic
BV Financeira
Banco Votorantim is one of the leading players
in the auto financing market
Down payment (%) and Average term (months)
Auto finance interest rate x Selic² rate (% p.y.)
Origination of auto loans (R$B)
Consumer Finance – Auto Finance
11
270 257 304
314 299297
Administrative
Personnel
2Q16
601
1Q16
556
2Q15
584
1. Excludes expenses with labor lawsuits
Note: The IPCA price index reached 8.8% in the last 12 months. In 2Q16 labor lawsuits summed up R$ 75M against R$ 92M in the 1Q16
Efficiency ratio –
last 12 months¹ (%) 39.7 38.5
Effective cost management Administrative and personnel expenses showed a nominal reduction by 0.7% in 1H16/1H15
39.1
535 561
630 596
-0.7%
1H16
1,157
1H15
1,165
+18.2%
-0.6%
∆2Q16
/1Q16
Higher expenses with
collection (success fees)
and technology
Personnel and administrative expenses (R$M)
Personnel and administrative expenses
12
10886146
706726843
2Q16 1Q16 2Q15
NII and Income from Services¹ and Insurance Credit provision expenses – ALL
Personnel and Administrative expenses Net Income and Net Margin (post provisions)
R$ Million
Consolidated results
Summary: Net Income of R$ 108M in 2Q16 Highlight to the consistent revenue generation and effective cost base management
274 311 328
2Q16
1,491
1,163
1Q16
1,544
1,233
2Q15
1,565
1,291
270 257 304
314 299297
Admin.
Personnel
2Q16
601
1Q16
556
2Q15
584
358 348 341
90 159116
Consumer
Finance
Wholesale
2Q16
457
1Q16
508
2Q15
448
Net Margin Net income
569 639
-0.1%
1H16
3,036
2,397
1H15
3,038
2,470
-0.7%
1H16
1,157
561
596
1H15
1,165
535
630
1H16
965
690
275
1H15
866
629
237
194
268
1H16
1,432
1H15
1,604
Net Interest
Income
Services¹
and Insurance
1. Income from services and banking fees
13
Funding profile improved over the last years Bills and Credit Assignments account for almost half (R$ 33.5B) of the total funding sources
Funding
Additionally, Banco Votorantim has a stand-by credit
facility of ~R$ 7B from BB, which has never been tapped
Loans securitized to
Banco do Brasil
Debentures
(BV Leasing)
Sub Debt
Loans and onlendings
Time deposits (CD)
Securities abroad
Other¹
Jun/16
67.5
17.8
(26%)
15.7
(23%)
16.2
6.4
6.2 1.8 1.5
17.4
6.2
6.7 2.4
6.6 1.4
Bills (LF, LCA and LCI)
Mar/16
72.3
17.5
(24%)
16.5
(23%)
16.7
6.6
7.0 2.3
3.3 2.2
Dec/15
78.0
17.2
15.7
17.9
6.9
7.9 2.2 8.1 2.0
Dec/14
72.3
16.3
(23%)
15.2
(21%)
1. Includes cash and interbank deposits and Structured finance certificates (“COEs”); 2. Excludes guarantees provided.
Note: International funding is 100% hedged for BRL
LF: R$ 14.8B
LCA and LCI: R$ 3.0B
Funding evolution (R$B)
Expanded credit portfolio²/
Total Funding 72% 81% 75%
2Q16: +R$ 1.7B
76%
Bond of R$ 0.7B
matured in May/16
14
Total Capital 10,967 9,742 9,675
Tier I Capital 7,105 6,587 6,892
Common Equity Tier I 7,105 6,587 6,892
Additional Tier I - - -
Tier II Capital 3,862 3,155 2,782
Risk Weighted Assets (RWA) 73,786 67,714 64,839
Credit risk 66,293 59,714 57,168
Market risk 3,087 1,984 1,654
Operational risk 4,407 6,016 6,016
Minimum Capital Requirement 8,116 6,687 6,403
Basel Ratio (Capital/RWA) 14.86% 14.39% 14.92%
Tier I Capital Ratio 9.6% 9.7% 10.6%
Common Equity Tier I Ratio 9.6% 9.7% 10.6%
Additional Tier I Ratio - - -
Tier II Capital Ratio 5.2% 4.7% 4.3%
Jun.16Mar.16Jun.15BASEL RATIO
(R$ Million)
Basel III Ratio of 14.9% in Jun/16 Tier I Capital ratio rose to 10.6%, entirely composed of Common Equity
Capital structure
Note: In 2016, the minimum capital requirement was changed to 10.50% (11.00% in 2015), including 0.63% for maintenance capital. For Tier I Capital, it is 6.0% and
for Principal Capital it is 4.5%.
15
Appendix
16
Banco Votorantim is one of the leading banks in Brazil “Top 10” in total assets, with strong shareholders and shared governance
Banco Votorantim is one of the largest
privately-held Brazilian banks in total assets...
Banco Votorantim – Overview
Shareholder
50% Total
10 largest Banks in Mar/16 - Total Assets (R$B)
...and also in terms of loan portfolio
141
175
222676
923
925
110Votorantim Safra
HSBC
BTG Pactual Santander
BNDES
Bradesco
CEF 1,205 Itaú 1,242
Banco do Brasil 1,443
10 largest Banks in Mar/16 – Loan Portfolio¹ (R$B)
State-owned
Foreign
National privately-held
45
49
58
67
247378
410
497
679
687
Safra
Votorantim
BTG Pactual
HSBC Santander
BNDES
Bradesco
Itaú
CEF
Banco do Brasil
State-owned
Foreign
National privately-held
1.On-balance loan portfolio according to Bacen’s Resolution 2,682. Note: CADE (Conselho Administrativo de Defesa Econômica) approved in Jun/16 the acquisition of HSBC in Brazil by Bradesco
Equal
representation
of each
shareholder Board of
Directors
Executive board
Fiscal
Council
Audit
Committee
Compensation
& HR
Committee
Products &
Marketing
Committee
Finance
Committee
Total: 50.00%
Voting: 49.99%
Non-voting: 50.01%
Total: 50.00%
Voting: 50.01%
Non-voting: 49.99%
Votorantim Group Banco do Brasil
Ownership Structure
Corporate Governance Structure
9th
10th
17
Shareholders
Pillars
Banco do Brasil Grupo Votorantim +
R$ 59.4B
XX Expanded² credit portfolio
Strategy
Consumer Finance
Auto
Finance
To originate portfolios with quality, scale and profitability
To focus on used auto finance (multi-brand dealers), where BV has a history of leadership and expertise
Other
Businesses
Payroll loans: to focus on
INSS (portfolio refinancing)
and Private (portfolio growth)
Credit cards, insurance,
individual loans and
CrediCasa (home equity): to
leverage the existing client
base
Other synergies with BB:
Promotiva, mortgage, etc.
R$ 33.1B
R$ 27.5B R$ 5.6B
Wealth
Mgmt. & BVEP
Asset: 9th largest in the market, with innovative products and growing synergies with BB
R$ 51.2B in AuM¹
Private: focus on estate management through tailor-made solutions
BVEP: investment in real estate projects
Wealth Mgmt.
Corporate &
IB (CIB)
To be the best wholesale bank to our target clients, focused on:
• Long-term relationships
• Capturing synergies in the origination and structuring of financial solutions
• Efficient capital management
Wholesale R$ 26.3B
Diversified business portfolio Focus on increasing business profitability, operating efficiency and synergies with BB
1. Assets under management 2. Includes guarantees provided by the Bank and private securities
18
Consumer Finance: increased focus on used auto
finance and INSS payroll loans (retirees and pensioners)
Payroll Loans Auto finance
Consumer Finance Businesses
Loan portfolio (R$B) Loan portfolio (R$B)
Consumer Finance businesses
Among market leaders in auto financing, with the following
advantages:
• Capillarity: presence in ~13,000 car dealerships nationwide
• Agility: 84% of proposals with automatic credit decision
• Expertise: continuous improvement of management tools
(pricing, credit, collection etc.)
• Long-term relationship: first access to customer record
Used
New
Jun/16
27.5
23.9
(87%)
3.6
Mar/16
27.7
23.9
3.8
Jun/15
28.8
24.0
(83%)
4.8
Focus on refinancing the INSS payroll loan portfolio
(retirees and pensioners)…
...and on increasing the private payroll loan portfolio
Selective operation in public payroll agreements
Continuous improvement of management tools
(pricing, credit, collection etc.)
5.1
3.4
0.8
0.9
(18%)
INSS
Private
Public
Jun/16
4.2
2.8
0.8
0.5
(13%)
Mar/16
4.4
3.0
0.8
0.6
(14%)
Jun/15
States: 40%
19
8.9 (34%)
7.8 (30%)
4.7 (18%)
3.3 (12%)
0.8 0.8
Highlights and strategy Corporate & Investment Bank (CIB)
Wholesale: continued focus on improving return on capital
and on strengthening the product portfolio
Wholesale Business (CIB)
Expanded credit portfolio (R$B and %)
Wholesale business
1. Includes debentures and promissory notes; 2. Includes export credit notes, working capital and Loan Offshore; 3. Rural Financing e Advances on Exchange Contracts; 4. “Ranking Anbima de Distribuição – Renda Fixa Consolidado (Jun/16)”
Additional strengthening of the balance sheet
• Prudential strengthening of credit provisions in view of the
uncertainties of the macroeconomic scenario
• 90-day Coverage Ratio exceeds 300% (261% in Mar/16)
Conservative approach to credit
• Focus on profitability (vs. asset growth)
Increased relevance of BV to its target clients
• Focus on 400 Corporate groups with credit exposure and
better risk profile, plus Financial Institutions
Exit of non-core clients
Focus on capturing synergies in the origination and
structuring of Credit, IB, Derivatives and FX
Local Fixed Income Distribution Ranking4
7th 3rd
Loans2
Onlending
Financ Export / Import Other3
Guarantees provided
Private
securities1
Expanded credit
portfolio
R$ 26.3B
Diversified portfolio of
wholesale products 1H16
0.8
1H15
0.6
Distributed
amount (R$B)
20
Balance Sheet
Balance Sheet
Jun.16/Mar.16 Jun.16/Jun.15
CURRENT AND LONG-TERM ASSETS 102,935 108,890 107,564 (1.2) 4.5
Cash and cash equivalents 221 210 141 (32.7) (36.0)
Interbank funds applied 18,208 17,030 19,855 16.6 9.0
Securities and derivative financial instruments 24,330 31,117 27,458 (11.8) 12.9
Derivative financial instruments 1,423 2,929 4,231 44.5 197.3
Interbank accounts or relations 59 442 619 40.2 -
Loan Operations, Leases and Others receivables 51,675 48,363 46,477 (3.9) (10.1)
Alowance for loan losses (3,824) (3,046) (2,989) (1.9) (21.8)
Tax credit 6,732 7,273 7,260 (0.2) 7.9
Others 4,113 4,572 4,511 (1.3) 9.7
NON-CURRENTS 400 417 463 11.2 15.9
Investments 234 216 262 21.1 12.0
Fixed assets 94 98 95 (3.3) 1.0
Intangible and deferred charges 73 103 107 4.2 47.7
TOTAL ASSETS 103,335 109,307 108,028 (1.2) 4.5
Jun.16/Mar.16 Jun.16/Jun.15
CURRENT AND LONG-TERM LIABILITIES 95,457 101,186 99,709 (1.5) 4.5
Deposits 5,034 4,491 3,708 (17.4) (26.3)
Demand deposits 78 78 76 (1.5) (2.5)
Interbank deposits 1,771 2,086 1,795 (14.0) 1.3
Time deposits 3,184 2,327 1,837 (21.0) (42.3)
Money market borrowings 27,937 36,653 38,070 3.9 36.3
Acceptances and endorsements 23,691 20,860 19,276 (7.6) (18.6)
Interbank accounts 57 35 32 (8.2) (44.3)
Borrowings and onlendings 6,820 7,032 6,209 (11.7) (9.0)
Derivative financial instruments 1,648 2,776 3,856 38.9 134.0
Others obligations 30,270 29,339 28,559 (2.7) (5.7)
Subordinated debts 7,168 6,648 6,426 (3.3) (10.4)
Credit transactions subject to assignment 17,015 16,538 15,690 (5.1) (7.8)
Others obligations 6,086 6,153 6,443 4.7 5.9
DEFERRED INCOME 31 41 36 (12.9) 15.5
SHAREHOLDERS’ EQUITY 7,847 8,080 8,282 2.5 5.5
TOTAL LIABILITIES 103,335 109,307 108,028 (1.2) 4.5
BALANCE SHEET | Liabilities
(R$ Million)Jun.15 Mar.15 Jun.16
Variation %
BALANCE SHEET | Assets
(R$ Million)Jun.15 Mar.15 Jun.16
Variation %
21
51.251.247.446.643.8
Jun/16 Mar/16 Dec/15 Sept/15 Jun/15
Total Assets Assets under Management¹
On-balance loan portfolio
108.0109.3110.2110.3103.3
Jun/16 Mar/16 Dec/15 Sept/15 Jun/15
Financial highlights
35.1 34.2 33.6 33.5 33.1
16.7 17.0 17.4 15.2 13.7
46.9
Consumer
Finance
Wholesale
Jun/16 Mar16
48.7
Dec/15
51.0
Sept/15
51.1
Jun/15
51.8
Financial highlights
R$ Billion
Shareholders’ Equity
1. Includes onshore funds (ANBIMA criteria) and private clients resources. Note: Shareholders’ Equity includes the destination of dividends (R$ 114 million) in Dec/15
+8.7%
Jun/16
8.28
Mar/16
8.08
Dec/15
7.62
Sept/15
7.78
Jun/15
7.85
22
Net Interest Income (A) 1,291 1,233 1,163 -5.7% 2,470 2,397 -3.0%
Average Interest-Earning Assets (B) 95,337 97,909 95,988 -2.0% 93,570 96,864 3.5%
Compulsory Deposits (Bacen) 43 206 489 137.0% 47 333 -
Interbanks Funds Applied 16,475 17,109 18,443 7.8% 13,442 18,024 34.1%
Securities 25,783 30,771 29,288 -4.8% 26,900 29,667 10.3%
Loan Portfolio 53,036 49,823 47,769 -4.1% 53,182 48,840 -8.2%
NIM (A/B) 5.5% 5.1% 4.9% -0.2 p.p. 5.3% 5.0% -0.3 p.p.
NET INTEREST MARGIN (NIM)
(R$ Million)
Var.
2Q16/1Q161H161H15
Var.
1H16/1H151Q162Q15 2Q16
Net Interest Margin (NIM)
Financial highlights – NIM
23
Total Personnel¹ and Administrative expenses (A) 503 464 526 13.3% 989 990 0.1%
Total Revenues (B) 1,332 1,334 1,313 -1.6% 2,683 2,647 -1.4%
Net Interest Income (NII) 1,291 1,233 1,163 -5.7% 2,470 2,397 -3.0%
Fee/Banking Fee Income 220 257 264 3.0% 463 521 12.6%
Income from subsidiaries² 39 43 47 11.0% 77 90 16.6%
Other Operating Income/Expenses (219) (199) (162) -18.3% (326) (361) 10.6%
Efficiency Ratio (A/B) - period 37.7% 34.8% 40.1% 5.3 p.p. 36.9% 37.4% 0.5 p.p.
Efficiency Ratio - last 12 months 38.5% 39.1% 39.7% 0.6 p.p. 38.5% 39.7% 1.0 p.p.
EFFICIENCY RATIO (ER)
(R$ Million)
Var.
2Q16/1Q16
Var.
1H16/1H151H15 1H161Q162Q15 2Q16
Efficiency Ratio
1. Excludes expenses with labor lawsuits; 2. Subsidiaries accounted by the equity method
Financial highlights - ER
24
Jun/16
3,221
6.9%
2,989
232
Mar/16
3,271
6.7%
3,046
225
Dec/15
4,387
8.6%
4,152
235
Sept/15
4,425
8.6%
4,200
225
Jun/15
3,979
7.6%
3,824
155
All balance / Managed loan portfolio
Especific + Additional
Generic²
ALL Balance (R$M) Managed loan portfolio rated by risk level¹ (%)
1. According to Bacen’s Resolution 2,682; 2. Considers balance of R$ 232M of “generic” credit provisions recognized as Liabilities in the "Other“ line (see Note #18d of
2Q16 Financial Statements)
Credit quality indicators
Credit portfolio
90.2%
9.8%
Mar/16
90.6%
9.4%
Dec/15
88.8%
11.2%
Sept/15
89.7%
10.3%
Jun/15
89.8%
10.2%
AA-C
D-H
Jun/16
151 170 197141 140
639693
838834
2Q16 1Q16
1,215
4Q15 3Q15 2Q15
Credit Recovery (R$M) Net Loss (R$M)
683 669495 500
2Q16
4.3%
1Q16
9.1%
1,074
4Q15
3.9%
3Q15
5.3%
2Q15
5.3%
Net Loss/Managed loan portfolio Net Loss Write-off Credit Recovery
25
1.15% 1.07%
1.75% 1.57%
-0.12%
1.90%
0.98% 0.67%
1.64% 2.24%
0.94% 1.04%
1.36%
0.82
2Q16
0.64 0.56
1Q16
1.22
0.55
4Q15 2Q15
0.83
-0.07
1Q15
0.58
1.05
4Q14
0.67 0.55
3Q14
0.77
0.38
2Q14
0.86 0.96
1Q14
0.87
1.36
4Q13
0.87
0.58
3Q13
0.90 0.66
2Q13
1.34
0.90 0.69
3Q15
0.90 0.84
New NPL rate
1. Variation in the balance of 90-day NPL balance + loans written-off to loss in the quarter, divided by loan portfolio by the end of the immediately preceding quarter
New NPL
rate
Write-off (R$B)
New NPL (R$B)
Credit portfolio
Managed Loan Portfolio (A) 63,546 61,281 60,539 58,281 56,806 55,712 55,231 55,422 52,505 51,576 51,250 48,799 46,925
90-day NPL Balance 3,616 3,373 3,081 3,563 3,662 3,273 3,154 3,628 2,727 2,712 2,923 2,254 2,174
90-day NPL Quarterly Variation (B) (439) (244) (292) 482 99 (388) (119) 474 (902) (14) 211 (669) (80)
Write-off (C) 1,339 902 869 874 857 771 666 578 834 838 693 1,215 639
New NPL (D=B+C) 900 659 578 1,356 955 383 547 1,052 (67) 823 903 546 560
New NPL Rate¹ (D/A) 1.36% 1.04% 0.94% 2.24% 1.64% 0.67% 0.98% 1.90% -0.12% 1.57% 1.75% 1.07% 1.15%
2Q161Q16NEW NPL
(R$ Million)3Q151Q14 2Q14 3Q14 4Q14 1Q15 2Q152Q13 3Q13 4Q13 4Q15
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Wholesale has a diversified credit portfolio Top 20 sectors account for 84% of the Wholesale credit exposure
1. Numbers exclude private securities and are net of credit provisions. Note: Does not consider application of Credit Conversion Factor of 50% in transactions relating to
some specific guarantees provided.
Credit portfolio
R$M Part.(%) R$M Part.(%) R$M Part.(%)
Financial Institutions 4,448 18.1% 3,800 17.3% 3,752 18.2%
Sugar and Ethanol 2,290 9.3% 2,033 9.2% 1,823 8.9%
Telecom 1,708 7.0% 1,568 7.1% 1,606 7.8%
Petrochemical 1,365 5.6% 1,558 7.1% 1,567 7.6%
Retail 923 3.8% 1,440 6.5% 1,236 6.0%
Mining 508 2.1% 889 4.0% 883 4.3%
Railw ays 627 2.6% 810 3.7% 781 3.8%
Agribusiness 1,288 5.3% 908 4.1% 762 3.7%
Eletricity Generation 667 2.7% 751 3.4% 605 2.9%
Government 587 2.4% 616 2.8% 565 2.7%
Road Cargo Transportation 460 1.9% 527 2.4% 507 2.5%
Residential Construction 668 2.7% 462 2.1% 459 2.2%
Electricity Distribution 643 2.6% 448 2.0% 426 2.1%
Food Industry 316 1.3% 423 1.9% 411 2.0%
Oil & Gas 201 0.8% 401 1.8% 401 1.9%
Pulp and Paper 706 2.9% 606 2.8% 361 1.8%
Automotive 515 2.1% 391 1.8% 324 1.6%
Services 508 2.1% 304 1.4% 314 1.5%
Slaughterhouses 288 1.2% 292 1.3% 286 1.4%
Beverages 382 1.6% 235 1.1% 271 1.3%
Other sectors 5,432 22.1% 3,544 16.1% 3,235 15.7%
Total¹ 24,532 100.0% 22,005 100.0% 20,576 100.0%
Wholesale - Sectoral concentrationJun.15 Jun.16Mar.16
27
Banco Votorantim’s main ratings
Ratings
RATING AGENCIES Internacional National
Local Foreign Local
Moody’s
Long-term Ba2 Ba3 Aa3.br
Short-term NP NP BR-1
Standard & Poor’s
Long-term BB brA+
Short-term B brA-1
Brazil
Sovereign rating
Ba2
BB